Reuters is reporting China Telecom, the smallest of China's big three telecom operators, plans to bring the iPhone to its 106 million subscribers by the end of the year.

Oddly enough in a place where a large portion of iPhones are manufactured, the only Chinese telecom currently offering the iPhone is China Unicom. Unicom signed a three-year agreement with Apple in 2009, but it isn't a revenue-sharing model like AT&T here in the U.S. The only money Unicom and other chinese providers make money off of iPhone sales is though money generated by adding users to their network.

The reason telecom operators are fighting for the iPhone business is because everybody is trying to grab as many 3G users as possible. The only way to keep costs down is to build up such a user base. - Jane Wang, analyst at UK-based research firm Ovum

According to Reuters sources close to China telecom are expecting iPhones to be available on the network as early as November. Whenever the release, adding 106 million more possible customers in the worlds largest mobile market, (896 million subscribers) would be an amazingly huge boost to Apple's bottom line.